Nasdaq 100 and S&P 500: Bullish Streaks Continue Amid Falling Volatility

U.S. Stock Futures Mixed as S&P 500 and Nasdaq Extend Winning Streaks

U.S. stock futures showed a mixed performance on Tuesday morning after the S&P 500 and Nasdaq Composite extended their winning streaks to eight consecutive sessions, marking the longest run in 2024.

At 12:53 GMT, Dow futures are trading 40984.00, down 36.00 or -0.09%. S&P 500 Index futures are at 5631.25, up 1.25 or +0.02% and Nasdaq 100 futures are trading 19856.25, down 1.50 or -0.01%.

This follows a robust trading day where both indices notched significant gains, with the S&P 500 seeing its best streak since November 2023 and the Nasdaq achieving its longest winning run since December 2023.

The rally has been underpinned by a steep decline in market volatility, as indicated by the CBOE Volatility Index (VIX) dropping below 15, down from over 65 on August 5, when the S&P 500 experienced its worst session since 2022 amid a global sell-off.

Broad Market Gains Across Sectors

The rally has broadened, with multiple sectors of the S&P 500 achieving record closes on Monday. Financials, health care, and consumer staples were particularly strong. Capital One and Synchrony led gains in the financial sector, each rising more than 2%.

In health care, Moderna surged 3.6%, and Dexcom climbed 4%. The consumer staples sector was boosted by Lamb Weston, which gained over 3%, and Clorox, which rose 2.6%. All 11 sectors of the S&P 500 closed in positive territory, with information technology leading the charge, up 1.44%.

Earnings Reports Influence Market Sentiment

In corporate news, Palo Alto Networks saw a premarket rise of 2% after reporting stronger-than-expected fiscal fourth-quarter results. The cybersecurity company provided bullish guidance for the current quarter, with earnings per share forecasted to exceed analysts’ estimates, and announced a $500 million increase in its share buyback program.

On the other hand, Lowe’s reported mixed quarterly results, missing revenue expectations but beating on profit. Despite cutting its full-year guidance due to anticipated weaker consumer spending, Lowe’s shares edged up 0.5% in premarket trading.

Focus Shifts to Federal Reserve’s Jackson Hole Symposium

Traders are now turning their attention to the Federal Reserve’s annual Jackson Hole Economic Symposium, where Fed Chair Jerome Powell will speak on Friday. The market is keenly anticipating insights into future monetary policy directions, especially after the release of the minutes from the Fed’s July policy meeting on Wednesday. Current pricing from Fed funds futures suggests a 100% chance of a rate cut in September, according to the CME FedWatch Tool.

Market Outlook

Given the ongoing rally and supportive economic data, the market is likely to maintain a bullish bias in the short term. However, much will depend on the tone of Powell’s remarks and the Fed’s stance on interest rates at the Jackson Hole Symposium. A cautious approach is recommended as traders gauge the Fed’s next move, which could either sustain or temper the current market momentum.

Technical Analysis

E-mini S&P 500 Index are inching higher on Tuesday. Although momentum is pointing higher, the early price action suggests a more tentative trade as the index approaches the July 16 record high at 5721.25.

On the downside, the best support is the 50-day moving average at 5522.75.